The Great Game Folio: Saudi succession

At a moment when the world is marvelling at the bold Saudi strategy of driving down oil prices — this week they dipped for a moment below $50 a barrel — King Abdullah, 90, has been hospitalised with pneumonia, setting off speculation about the kingdom’s stability and the international consequences of a political transition in Riyadh.

Abdullah acceded to the Saudi throne in 2005, when his half-brother King Fahd passed away. But Abdullah had been the crown prince since 1982 and was in charge of the kingdom during Fahd’s prolonged illness in his final years.

The king of Saudi Arabia is more than a mere monarch. He is the custodian of the Muslim holy places in Mecca and Medina, and exercises great political influence in the Islamic world. Since the fall of Egypt’s Gamal Abdel Nasser in the late 1960s, Saudi Arabia has acquired a decisive influence in shaping the regional order in the Middle East. The kingdom has been a strong ally of the Anglo-Saxon powers and enjoyed great clout in shaping the world economy.

With nearly a fifth of the world’s proven oil reserves and the very low costs of exploiting them, some have described the king of Saudi Arabia as the “custodian of the world’s oil prices”. As has been demonstrated in the last few weeks, Saudi Arabia remains the swing producer that can unilaterally determine the international price of oil.

Unlike in other monarchies, the Saudi succession has moved horizontally from one brother to another among the 40-odd sons that the founder of the kingdom, Abdul Aziz, fathered. Abdullah’s designated crown prince, Salman, is 79 years old; but he is said to be ill. The deputy crown prince Muqrin, the youngest of the second generation, is 69.

Some analysts worry that Abdullah’s death might generate considerable internal jockeying for power in Riyadh.

Others believe that Abdullah has had enough time to organise a smooth transition to the third generation of leadership. There is speculation that Abdullah has positioned his son, Prince Miteb, currently the head of the powerful National Guard, at the top of the heap in the third generation. Some are betting that when King Abdullah abdicates or passes away, his son Miteb could be appointed deputy crown prince.

REGIONAL TURBULENCE

The internal problems of succession look rather simple in comparison to the massive external challenges that Saudi Arabia faces.

If his predecessors had the reputation for political passivity, King Abdullah had brought a measure of assertiveness to Saudi Arabia’s foreign policy.

Amidst growing perception that Saudi Arabia is losing its clout in the oil market, Abdullah has taken on high-cost oil production around the world, including shale gas exploitation in the US, by forcing lower prices. This involves considerable cost to Saudi Arabia in the near term and Abdullah has been willing to run the risk.

Angered by the American empathy for the Arab Springand concerned that Washington might cut a nuclear deal with Iran, Abdullah has acted vigorously in the region. He sent troops into Bahrain to assist the minority Sunni elite in putting down a popular revolt. Abdullah offered strong support to the Egyptian army when it ousted the Muslim Brotherhood government in Cairo led by Mohammed Morsi. He actively sought to blunt the regional policies of Turkey and Qatar that backed the Brotherhood.

Fears of rising Iranian power and Tehran’s support to Shia formations across the region saw Abdullah back the Sunni militias in Syria and Iraq. The rise of Sunni extremism in the form of the Islamic State that threatens the interests of both Saudi Arabia and Iran has begun to encourage Abdullah to limit the regional rivalry with Tehran in the last few months.

DELHI’S ARABIA

Over the last decade, Abdullah unveiled a “Look East” policy that lent Asia greater salience in the Saudi worldview. Abdullah became the first Saudi monarch ever to visit China. His trip to India as the chief guest on Republic Day in 2006 was the first by a Saudi king in more than 50 years.

If Beijing moved with great speed to consolidate the partnership with Riyadh, the UPA government seemed somewhat slow in seizing the new opportunities that opened up in Saudi Arabia under Abdullah.

The NDA government, focused as it has been on the immediate neighbourhood and the great powers, has not devoted sufficient attention to the Middle East in 2014. As New Delhi turns to the Gulf in 2015 and tends to its high stakes in the region, an intensive engagement with Saudi Arabia must be at the top of Prime Minister Narendra Modi’s diplomatic priorities.

-

The city of activism and hope:delhi

Delhi has grown exponentially in the last couple of decades as a result of universal factors like migration, industrialisation, urbanisation. Delhi has always been a city of migrants. In the wake of Independence, it witnessed the influx of massive numbers of refugees who came from the newly born state of Pakistan. Post Independence, the city was built largely by these refugees, who came mostly from Punjab, imbuing it with an initial identity that was Punjabi.

Then Delhi became the capital of the new government of India. As the seat of political power, the city attracted a large number of government employees from all parts of the country. It also became home to politicians from different states. Thus, the city became a political and government bastion.

In the last two decades, the processes of globalisation, industrialisation and urbanisation have added waves of migration to the city. Many of these people were economic migrants who came to the capital in search of opportunity and employment. They came mostly from Uttar Pradesh, Bihar and West Bengal (though it is alleged that it was actually Bangladesh). Thus, in the late 1990s, the city’s character began to change from a Punjabi-dominated city to a city dominated by the Purabiyas, people from eastern UP and Bihar.

These various identities continue to influence public life in Delhi. Six decades after Independence, the city is the political nerve-centre of the country. Thousands of aspiring and established politicians throng the city, lending it an extremely political colour. Of late, politics has become a subject of derision thanks to a sustained smear campaign. Of course, there are good politicians and bad — but this is also true of every other profession. What is notable is that, in the last few years, the political identity of the city has also undergone a major transformation. Many young people have entered the political arena. The city’s seven Lok Sabha MPs are all young by the standards of Indian politics. In city politics, too, the dominant role is being essayed by young leaders.

Delhi today has emerged as a city of activism and hope, with an omnipresent youthful energy. A new socially and politically conscious generation is changing the contours of public life in the city. True, Delhi is notorious today for the high incidence of violence against women, and is labelled the “rape capital”. The crime rate in general is also high. But the city has also witnessed huge public mobilisations against corruption and crimes against women. Young Delhi knows how to demand accountability.

This is not a rowdy youth. Instead, it is aspirational, creative and, most importantly, socially conscious. There was
a time when people thought that urbanisation was bad. Now though, cities have become the lifeline for creative and aspirational young men and women, educated or not.

The city is not just about politics, though. It has an underbelly that is anything but political. Mahatma Gandhi used tosay that India lives in villages. What he meant was that the culture, traditions and ethos of our land are better preserved and protected in villages, which is largely true. Equally true is that the migrants who come to Delhi or any other city bring with them their cultures and traditions, too. That is why Delhi is in celebration mode all through the year. From the Tamil Pongal to the Malayali Onam and the Ganesh Chaturthi of the Marathis, from the Gujarati Garba to Holi and Durga Puja — when is there no celebration in Delhi?

Young men and women drive life in the city today. There is no cause for concern over their youthful activities, the clothes they wear or the places they visit. We must have faith in them and guide them, because they are no less idealistic than any previous generation of young people. We may find them at a bar or a coffee bar; watch them closely and they’ll likely be talking about a Narendra Modi or an Anna Hazare, discussing corruption and cursing social evils.

They have dreams in their eyes and ideas on their minds. Where we have failed is in giving them direction. We have to create excellent educational institutions in Delhi and improve the standards of our schools and colleges. We have to encourage sports in a big way. We have to create a conducive atmosphere for non-governmental activism. We have to allow youngsters to take over public life in the city. Perhaps we could hand over to them public spaces like parks and playgrounds and ask them to manage them?

Swami Vivekananda returned to India in 1897 after a four-year sojourn in the West. He reached Colombo and then travelled across the length and breadth of the country for over a year, ending his journey in Almora. He addressed hundreds of meetings during his year-long travel. He began his address at almost all of them by invoking youthful energy: “Oh, my dear young men and women of Madras! All my hopes lie on you,” he would say. Can we also say that
to our youth?

Google's Page named as business person of the year for 2014

Google's Larry Page has emerged as the 'business person of the year' for 2014, edging past the likes of Alibaba co-founder Jack Ma and Facebook CEO Mark Zuckerberg, according to Fortune magazine.



Page, who is Chief Executive Officer (CEO) and co-founder of Google, came on top in the 20 global corporate leaders' list compiled on the basis of various factors including company's performance, leadership style and total shareholder returns, the magazine said while bringing out its list.



Apart from Jack Ma and Zuckerberg, others in the race included Apple's Tim Cook and fast food chain Chipotle co-CEOs -- Montgomery Moran and Steve Ells-- and Fedex chairman & CEO Fred Smith.



Besides, five women have made the cut to the top 20 list.

Interestingly, Amazon's Jeff Bezos, who led Fortune list in 2012, failed to make in to the top 20 list.



As Google's core business continues to thrive, Page, who topped the list, is making "huge bets on new technology -ingestible nanoparticles, balloons that beam down broadband- that could define the future," the magazine noted.



Page and his company have packed a lot of evolution into just over 15 years of existence, it added.



The women contenders were Ultra Beauty CEO Mary Dillon, ITT CEO and President Denise Ramos, TJX Cos CEO Carol Meyrotwiz, Theranos Founder and CEO Elizabeth Holmes and Williams-Sonoma President and CEO Laura Alber.



The list is based on various parameters like financial results of the company including 12-month and three year growth in profits and revenues, company's stock performance and total shareholder returns over the same periods.



Besides, several non-financial elements like business influence, leadership style, strategic initiatives played a part in evaluation.

Improving an unworkable law

For the land-acquirer, the land act ordinance tries to lessen the indirect price of acquisition and transaction by diluting requirements for social impact assessments and referenda. For the land-loser, it not only retains all forms of compensation and rehabilitation, but also grows the number of those eligible for lucrative pay-offs

The government of India continues to search for the right way to do land acquisition. Last week, the Union Finance Minister announced an ordinance to amend the Land Acquisition Bill that his party, the Bharatiya Janata Party (BJP), had helped vote into law a mere 15 months ago. It had been in force for less than one year. That law, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR), had been pushed through by the United Progressive Alliance (UPA) in its dying days. It had many detractors. Private industry said that it was the biggest obstacle to growth. Most State governments, including several Congress-led ones, thought it was unworkable. I wrote that embedded in LARR were the seeds of its own destruction.

That LARR would be changed was obvious in the first weeks after the BJP stormed to power at the Centre. There were whispers and much speculation, but nothing official. Now, it is out in the open and we can pass judgement. So, what does this ordinance reveal about the thought processes of the leaders of the Modi government? Is this a new approach? Is it any better than the old one? What could have been done differently?

Focussing on the land-loser

We need to ignore the predictable noises being made by the usual suspects. The pro-business crowd, from Goldman Sachs to Dalal Street, can barely suppress its elation. Several pro-farmer groups, especially significant non-governmental organisations like the National Alliance of People’s Movements, whose ideas had formed the initial blueprint of LARR, have called this a giveaway to the corporate sector. Anti-BJP political parties like the Congress, the CPI(M), the Samajwadi Party and the Trinamool Congress have vowed to fight these changes with all their might. All these people cannot simultaneously be right.

“Compensating non-owners is a vital and non-negotiable element of LARR. How that will be achieved without the social impact assessments remains unclear.”

To get analytical clarity, we need to start from basics. LARR was meant to make the acquisition process just. It was designed in the mode of the Congress’s other landmark laws on information, education, and food — using a rights-based approach — where the primary objective was to deliver “fairness” to the people affected by land acquisition. LARR expanded the definition of project-affected people and expanded the rights, protections and compensations for people who lose land or livelihood as a result of acquisition. All these were laudable and necessary. But LARR was also a purely political and fundamentally bureaucratic approach based on little or no recognition of some simple economic principles — on land markets and on transaction and opportunity costs. The underlying presumption was that the price of land matters to the land-loser but not to the land-acquirer; as a result, LARR raised the price of land acquisition to unsustainable levels.

Price matters to acquirer and loser

This price is not simply the money paid for acquisition and rehabilitation and resettlement. That is just one component of price, its direct component. There is a second component, an indirect price. This includes (a) transaction costs, which include the cost of doing social impact assessments, conducting referenda, running the massive new multilayered acquisition bureaucracy, etc. and (b) opportunity costs, which arise from the time taken to conclude an acquisition — doing social impact assessments, conducting referenda, etc. — time during which capital is not invested, infrastructure is not created, and production does not take place. If all the steps defined in LARR were accomplished in the allotted time, each acquisition would require about five years; in practice, it could take a lot longer.

The Modi government’s ordinance — unlike the UPA government’s law — is based on the principle that price matters to both the land-acquirer and the land-loser. Their interests are opposed, because the land-acquirer would like to pay the least he or it can get away with, and the land-loser would like to get the most he or it can manage. So, how does the ordinance solve this problem? Quite simply, as a matter fact, by splitting the direct and indirect prices for acquisition and keeping the direct prices unchanged while attacking the indirect prices.

For the land-acquirer, the ordinance tries to lessen, as much as it can, the indirect price of acquisition, the transaction and opportunity costs that have been listed. This it does by weakening or removing the requirements for social impact assessments and referenda. For the land-loser, the ordinance not only retains all forms of compensation and resettlement and rehabilitation, but also grows the number of land-losers eligible for these lucrative pay-offs by bringing into the ambit of LARR, 13 categories of acquisition that had been excluded earlier. These include the Land Acquisition (Mines) Act, the Atomic Energy Act, the Railways Act, the National Highways Act, and the Metro Railways (Construction of Works) Act. These inclusions were indicated in LARR, but are accomplished in this ordinance.

The reason this ordinance is likely to work in the short term and the reason it may run into trouble in the long term is the same — the underlying land market in India. Land prices in India are now the highest in the world (with the possible exception of China, where, for approximately the same reasons as in India, prices have reached unprecedented levels). For most pieces of agricultural land, these market prices are several times higher than the possible returns from keeping the land in agricultural use. When these very high prices are quadrupled or doubled, it creates a windfall for land-losers, a fortune they could never earn from agriculture. The Modi government is betting that the vast majority of people will be dazzled by the money and will acquiesce to acquisition. And by vastly increasing the scope of LARR, by bringing under its ambit several more types of acquisition and many more people, the government and the BJP can claim to be as pro-farmer as anyone else (even if the enlargement had been envisaged in the original law).

For the land-acquiring interest — be it the private or public sector — reducing the time for acquisition by several years, and thereby reducing the opportunity cost, is a huge benefit. When this is topped up with the reduction or removal of the cash cost of social impact assessments and referenda, it becomes a windfall for the acquirers too. LARR had placed an impossible double-burden on land acquirers: pay double or quadruple the highest prices in the world, and wait for several years to begin work on the ground. The first burden remains and its consequences are grave. What those consequences may be must be carefully worked out by people competent to do so. But the second burden has been mitigated by this ordinance. It should make life easier for the land-acquirer.

Price factor

What, aside from partisan politics, could go wrong? There are many things, but I will mention just three. First, the assumption that everyone responds to price is incorrect in India. There are priceless pieces of land that no amount of money can buy. The Niyamgiri hill region in Odisha where the Vedanta mining project ran aground is an example. Without referenda it may be very difficult to identify priceless land; which means that deadly face-offs over acquisition will continue to flare up. Second, the social impact assessment was meant primarily to take stock of the non-land-owning project-affected population. Compensating non-owners is a vital and non-negotiable element of LARR. How that will be achieved without the social impact assessments remains unclear.

Third and most important: the price of peri-urban land has reached such levels in the most dynamic urban regions of the country, that just doubling it (even without the added transaction and opportunity costs) may make many public projects unaffordable and private projects uncompetitive (especially in a globalised economy). The blunt instrument of acquisition is already inappropriate in many such settings; using LARR, even after the ordinance, it may be impossible. New, creative methods that make stakeholders out of landholders must be devised, perhaps by following the better outcomes of some of the experiments being attempted in some States.

Is this ordinance a better way than LARR? Yes. Is there a better way than this? Very much so, and it is based on finding State-level solutions rather than these top-down, one-size-fits-all strategies devised by the Centre. And above all, as a friend says, what we need are good intentions combined with clear analysis and hard, detailed work. Unfortunately, all these are in short supply.

Citizenship (Amendment) Ordinance, 2015 Promulgated

The President of India has promulgated the Citizenship (Amendment) Ordinance, 2015 on January 06, 2015 with immediate effect which provides for the following amendments to the Indian Citizen Act, 1955: • At present one year continuous stay in India is mandatory for Indian Citizenship which is relaxed stating that if the Central Government is satisfied that special circumstances exist, it may, after recording such circumstances in writing, relax the period of twelve months specified upto a maximum of thirty days which may be in different breaks. • To enable for registration as Overseas Citizen of India (OCI) by a minor, whose parents are Indian Citizens. • To enable for registration as Overseas Citizen of India (OCI) by a child or a grand-child or a great grandchild of such a citizen. • To enable for registration as Overseas Citizen of India (OCI) by such spouse of a citizen of India or spouse of an OCI registered under Section 7A and whose marriage has been registered and subsisted for a continuous period of not less than two years immediately preceding the presentation of the application under this section. • In respect of existing PIO card holders central government may, by notification in Official Gazette, specify a particular date from which all existing PIO card holders will be deemed to be OCI card holders. The Indian Citizenship Act, 1955 provides for acquisition, termination, deprivation, determination of Indian Citizenship and other related aspects. The Act provides for acquisition of Indian citizenship by birth, descent, registration, naturalization and incorporation of territory under certain circumstances, and also for the termination and deprivation of citizenship.

Playing dumb on climate change

Scientists have often been accused of exaggerating the threat of climate change, but it's becoming increasingly clear that they ought to be more emphatic about the risk. The year just concluded is about to be declared the hottest one on record, and across the globe climate change is happening faster than scientists predicted.

Science is conservative, and new claims of knowledge are greeted with high degrees of scepticism. When Copernicus said the Earth orbited the sun, when Darwin said species evolved by natural selection, the burden of proof was on them to show that it was so. In the 18th and 19th centuries, this conservatism generally took the form of a demand for a large amount of evidence; in the 20th century, it took on the form of a demand for statistical significance.

We've all heard the slogan "correlation is not causation," but that's a misleading way to think about the issue. It would be better to say that correlation is not necessarily causation, because we need to rule out the possibility that we are just observing a coincidence. Typically, scientists apply a 95 per cent confidence limit, meaning that they will accept a causal claim only if they can show that the odds of the relationship's occurring by chance are no more than one in 20. But it also means that if there's more than even a scant 5 per cent possibility that an event occurred by chance, scientists will reject the causal claim. It's like not gambling in Las Vegas even though you had a nearly 95 per cent chance of winning.

While there have been enormous arguments among statisticians about what a 95 per cent confidence level really means, working scientists routinely use it.

But the 95 per cent level has no actual basis in nature. It is a convention, a value judgement. The value it reflects is one that says that the worst mistake a scientist can make is to think an effect is real when it is not. This is the familiar "Type 1 error." You can think of it as being gullible, fooling yourself, or having undue faith in your own ideas. To avoid it, scientists place the burden of proof on the person making an affirmative claim. But this means that science is prone to "Type 2 errors": being too conservative and missing causes and effects that are really there.

Is a Type 1 error worse than a Type 2? It depends on your point of view, and on the risks inherent in getting the answer wrong. The fear of the Type 1 error asks us to play dumb; in effect, to start from scratch and act as if we know nothing. That makes sense when we really don't know what's going on, as in the early stages of a scientific investigation.

But when applied to evaluating environmental hazards, the fear of gullibility can lead us to understate threats. It places the burden of proof on the victim rather than, for example, on the manufacturer of a harmful product. The consequence is that we may fail to protect people who are really getting hurt.

And what if we aren't dumb? What if we have evidence to support a cause-and-effect relationship? Let's say you know how a particular chemical is harmful; for example, that it has been shown to interfere with cell function in laboratory mice. Then it might be reasonable to accept a lower statistical threshold when examining effects in people, because you already have reason to believe that the observed effect is not just chance.

This is what the US government argued in the case of second-hand smoke. Since bystanders inhaled the same chemicals as smokers, and those chemicals were known to be carcinogenic, it stood to reason that second-hand smoke would be carcinogenic, too. That is why the Environmental Protection Agency accepted a (slightly) lower burden of proof: 90 per cent instead of 95 per cent.

In the case of climate change, we are not dumb at all. We know that carbon dioxide is a greenhouse gas, we know that its concentration in the atmosphere has increased by about 40 per cent since the industrial revolution, and we know the mechanism by which it warms the planet.

The 95 per cent confidence limit reflects a long tradition in the history of science that valorises scepticism as an antidote to religious faith. Moreover, while vigorously denying its relation to religion, modern science retains symbolic vestiges of prophetic tradition. A vast majority of scientists do not speak in public at all, and those who do typically speak in highly guarded, qualified terms. They often refuse to use the language of danger even when danger is precisely what they are talking about.

Years ago, climate scientists offered an increase of 2 degrees Celsius as the "safe" limit or ceiling for the long-term warming of the planet. We are now seeing dangerous effects worldwide, even as we approach a rise of only 1 degree Celsius. The evidence is mounting that scientists have underpredicted the threat. Perhaps this is another reason we have underreacted to the reality, now unfolding before our eyes, of dangerous climate change.

Scepticism is built into science's DNA - which is why the world is underestimating the effects of climate change even when there is overwhelming evidence

5 things that differentiate NITI Aayog from Planning Commission

NITI Aayog vs Planning Commission

Parameter	NITI Aayog	Planning Commission
Financial clout	To be an advisory body, or a think-tank. The powers to allocate funds might be vested in the finance ministry	Enjoyed the powers to allocate funds to ministries and state governments
Full-time members	The number of full-time members could be fewer than Planning Commission	The last Commission had eight full-time members
States' role	State governments are expected to play a more significant role than they did in the Planning Commission	States' role was limited to the National Development Council and annual interaction during Plan meetings
Member secretary	To be known at the CEO and to be appointed by the prime minister	Secretaries or member secretaries were appointment through the usual process
Part-time members	To have a number of part-time members, depending on the need from time to time	Full Planning Commission had no provision for part-time members